Information technology investment: In search of the closest accurate method

Anggraeni Widya Purwita, Apol Pribadi Subriadi*

*Corresponding author for this work

Research output: Contribution to journalConference articlepeer-review

2 Citations (Scopus)

Abstract

In order to improve performance, company allocates significant amount of expenditures for IT investment. Regardless IT productivity paradox phenomenon, the companies certainly expect investment that have been made able to gain various benefits to the company. This research aims to compare five method of IT investment evaluation and find the closest accurate method according to selected literatures. Analysis was done by comparing: i) tangible and intangible ii) advantage iii) disadvantage iv) object and v) how to use. The result showed that Return on Investment (ROI), and Cost Benefit Analysis (CBA) focus on tangible. While Multi Criteria Decision Making (MCDM) focus on intangible. The method must justify tangible and intangible to get accurate result. Information Economics (IE) and Real Options Analysis (ROA) focus on both tangible and intangible. From both methods, IE was the closest accurate method because it could calculate tangible, quasi-tangible, and intangible, and also calculates the value of an investment based on enhanced ROI, business factors, and risk criteria.

Original languageEnglish
Pages (from-to)300-307
Number of pages8
JournalProcedia Computer Science
Volume161
DOIs
Publication statusPublished - 2019
Event5th Information Systems International Conference, ISICO 2019 - Surabaya, Indonesia
Duration: 23 Jul 201924 Jul 2019

Keywords

  • Accurate
  • Evaluation
  • Information technology
  • Investment
  • Method

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